%1

A bankruptcy judge yesterday refused to sign off on chapter 11 plan voting materials for Coldwater Creek Inc. and urged the liquidating retailer and its creditors to work out their differences over the payout scheme, the Wall Street Journal reported today. Bankruptcy Judge Brendan Shannon cited concerns that litigation over the money raised in the liquidation of the women’s clothing seller will erode the value gathered in Coldwater Creek’s bankruptcy and cost creditors more than they will gain. Coldwater Creek is no longer operating its stores but liquidators continue to run going-out-of-business sales, and a private equity firm that bought the brand has said it will revive the clothing line.

The committee representing equity holders of Genco Shipping and Trading Ltd. began making its case for receiving a larger distribution in the shipping company's chapter 11 restructuring yesterday during the first day of what's expected to be a four-day confirmation trial, Dow Jones Daily Bankruptcy Review reported today. Based on the lowest-end valuation of Genco determined by the equity committee's experts, holders of Genco equity securities should be able to recover nearly $100 million, Steven Bierman of Sidley Austin LLP argued in opening arguments on behalf of the equity committee — made up of Aurelius Capital Partners LP, Och-Ziff Capital Management Group and Mohawk Capital LLC. This estimate stands in contrast to the currently promised warrant recovery for equity holders, a gift valued by Genco at $32.9 million.

Energy Future Holdings Corp.’s unsecured bonds are soaring to the highest level in a year as junior creditors challenge the power producer’s plan to restructure about $40 billion of debt in bankruptcy, Bloomberg News reported yesterday. Bonds of the company that don’t have senior claims on assets returned 37.4 percent since April 29, when it filed for chapter 11 protection, beating the 1.7 percent gain for all high-yield, high-risk securities, according to data compiled by Bloomberg. Energy Future, formerly known as TXU Corp., was the subject of a record $48 billion leveraged buyout in 2007. The rally shows rising speculation that the plan may be blocked, increasing returns for some junior creditors and providing recoveries for others who were deemed out of the money. Bankruptcy Judge Christopher Sontchi assured lower-ranking lenders including Appaloosa Management LP and Marathon Asset Management LP last week that they’d have an opportunity to challenge Energy Future’s reorganization plan, adding that he wasn’t “buying into” the company’s method for valuing its assets this early in the case.

Months after a trust fund established as part of Eastman Kodak Co.'s bankruptcy sued hundreds of businesses around the planet, including a slew in the Rochester, N.Y., region, a growing number of those suits have been settled or dropped, the Rochester Democrat & Chronicle reported today. The Kodak General Unsecured Creditors Trust filed a mountain of suits — roughly 750 — in U.S. Bankruptcy Court in January, seeking to claw back potentially hundreds of millions of dollars Kodak spent in the weeks prior to it filing for Chapter 11. About a third of the cases have been settled or dropped, according to U.S. Bankruptcy Court filings. The court documents give no details on the settlements. In Kodak's case, the trust — set up by the bankruptcy court — apparently is suing pretty much everyone who received a payment from Kodak in the 90 days leading up to its filing for bankruptcy, looking for "preferential payments." Any money the trust raises is to go to the unsecured creditors who were left with unpaid bills and invoices when Kodak filed for chapter 11 bankruptcy in January 2012.

Natrol Inc. filed for bankruptcy yesterday, a day after a U.S. judicial panel consolidated several class actions accusing the health supplement maker of false marketing of its joint relief products, Reuters reported yesterday. Natrol, a unit of Plethico Pharmaceuticals Ltd. of India, also owns the Laci Le Beau dieter's teas, NuHair and Shen Min hair loss treatments and MRI and Prolab strength supplements. Natrol has been the target in the past year of at least three lawsuits seeking class action status filed in California, Illinois and New York federal courts. The lawsuits say that Natrol's glucosamine-related supplements cannot provide the advertised benefits of regenerating cartilage, lubricating joints and providing comfort, according to court documents.

A judge said that James River Coal Co. can pay up to $2.7 million in bonuses to its top executives, rejecting a challenge to the payments by the federal government’s bankruptcy watchdog, the Wall Street Journal reported today. Bankruptcy Judge Kevin R. Huennekens said yesterday that James River could pay the bonuses to nine top executives and approved a separate set of bonuses for 39 non-executives, with that pool totaling up to $1.4 million. U.S. Trustee Judy A. Robbins objected to the executive bonus plan because Judge Huennekens said that details of the bonuses could be filed confidentially with the court for competitive reasons. Robert B. Van Arsdale, an assistant to Robbins, argued that without publicly disclosing the terms of the packages, it’s impossible to know if they comply with the Bankruptcy Code.

Sears Methodist Retirement System Inc. filed for chapter 11 protection on Tuesday to deal with some $160 million worth of funded debt obligations attached to its operations, which include senior living communities and homes for veterans, Dow Jones Daily Bankruptcy Review reported today. The Texas nonprofit organization is asking the U.S. Bankruptcy Court in Dallas to authorize it to quickly borrow $600,000 from existing bondholders, warning that it would be forced to cease operations without access to the funds.

A Long Island olive importer is asking a bankruptcy judge to decide how much it owes customers for allegedly selling processed olive oil as pure, the Wall Street Journal reported today. Kangadis Food Inc., which is fighting claims that it improperly marketed a chemically treated olive byproduct as “100 percent pure olive oil,” recently sought bankruptcy protection in an attempt to put the brakes on a class-action suit over the alleged mislabeling. The family-owned company filed for chapter 11 Friday in U.S. Bankruptcy Court in Central Islip, New York, saying that the approximately $1.4 million in legal fees it has racked up over the past year and a half have hurt what is otherwise a profitable business. The goal of the filing, according to Kangadis Food’s bankruptcy lawyer, is to avoid paying an estimated $750,000 to $1 million more to defend itself in a class-action suit scheduled to go to trial in September.

Coldwater Creek Inc. has adjusted its chapter 11 payout plan but still faces a fight with unsecured creditors over its offer to give them seven cents to nine cents for each dollar they are owed, Dow Jones Daily Bankruptcy Review reported today. Coldwater Creek's lawyers filed a revised chapter 11 plan on Friday reflecting better-than-expected results from the women's clothing retailer's bankruptcy auction and asked for an Aug. 7 confirmation hearing to lock the plan in place.

Online retailer and distributor Dr. Bott, a fixture in the Apple-accessory market since the late 1990s, has filed for chapter 11 bankruptcy in its home state of Oregon, Macworld.com reported yesterday. The original petition was filed on May 1, with notices sent to creditors later in the month. Founded in 1999, Dr. Bott was originally a distributor providing accessories to independent Macintosh resellers. As a distributor, Dr. Bott was known for providing smaller accessory vendors the means of distributing their products much more widely than they could on their own. Though the company’s website currently advertises a Spring Cleaning Sale, sources told Macworld that the sale is mainly a way for Dr. Bott to sell off the company’s remaining inventory.